President Obama signed the 21st Century Cures Act into law creating an option for small businesses to offer employees a health reimbursement arrangement (HRA) that is funded by the employer.

Beginning January 1, 2017, the maximum employees can receive per year through the HRA is $4,950 for individuals who show they have individual coverage or up to $10,000 for workers who also have coverage for family members. The contribution cap will be indexed for inflation.

This arrangement is available to employers who are not applicable large employers (ALEs) subject to the employer mandate and do not offer group health plans to its employees. Employees who participate in this small business HRA may lose, or face a reduction, in their eligible subsidy from the marketplace to purchase insurance.

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